Netflix's Ted Sarandos Reveals His 'Phase 2' for Hollywood

Miller Mobley

Algorithms, deep pockets and a disdain for the existing TV model as the chief content officer reveals why the agent who talked about their budgets was "remarkably ill-informed," and countering "the managed dissatisfaction … of the entire entertainment business."

Sarandos:Hemlock is much more polarizing; you either love it or hate it. The crossover for the people who love the show was American Horror Story, not The Vampire Diaries. It was incredibly popular in the Nordics because of the popularity of the Skarsgards [Bill Skarsgard stars] and in Latin America, where the horror genre is very big.

THR: Will you renew it?

Sarandos: We’re hearing the pitches for the second season with plotlines and storylines now.

THR: How are you making decisions about whether to renew or cancel a series?

Holland: We’ll certainly look at how much viewing activity is taking place compared to what we projected when we licensed the series. How do we think it will play out over time? Is there an audience that justifies the expense? Certainly, what does it do for the overall conversation about Netflix? And long term, does it mean incremental subscribers or that subscribers stay around longer?

Sarandos: The signal that something is working is a renewal. But one of the things I loved about Derek is Ricky Gervais likes to make shows that exist in a one- or two-year time frame and then they’re done. I want our shows to be somewhere in between. So when people say how many episodes, I want it to be the exact number of episodes you need to tell the story perfectly. It’s very difficult to sustain a show beyond three years. Characters start to fall apart, and your writers turn over. Some of the other conventions that I'm happy to dismiss: How long does the episode have to be? And how many episodes does the season have to be? Because of the constraints of the business outside of Netflix, they have followed the same form — 13 one-hour episodes — but with Arrested Development, the running times of the shows are not rigidly 22 minutes, and there’s a 15-episode season.

THR: Reed Hastings suggested one season would be it for Arrested. True?

Sarandos: We would love to do more, and we have a deal in place that says that there could be. The problem is logistics. They were all working full-time and doing this show in between, and they did it for the love of the show and for Mitch Hurwitz. If we can muster up that love again, we’d love to do it again. And we have talked openly about a movie scenario, too.

THR: Walk us through how you use viewer data to make decisions.

Sarandos: Sometimes it’s explicit ratings: I watch this, then I rated it five stars because I loved it. Then there are implicit ratings: Even if somebody who watches 13 hours of a show in 24 hours doesn’t rate it, we’ve got a pretty good sense of how they felt. Or if they watch 20 minutes of the first episode and never came back, they don’t have to rate it zero for us to know they’re not interested. But it’s the overlaps that really matter. With House of Cards, it was identifying not just somebody who saw The Social Network or liked David Fincher but trying to figure out what everybody who liked Benjamin Button, Seven, Fight Club and Social Network have in common. It’s that they love David Fincher’s style of storytelling. They may not even be able to identify him by name, but we know from their behavior that that’s who they are. You look at Kevin Spacey fans, and then you say, “How about people who love political thrillers?” We went back and pulled all the political thrillers people have watched and rated highly. So you’ve got all these populations, and right where they overlap in the middle is the low-hanging fruit. If we can get the show in front of these people, they will watch it and love it.

THR: So you know who they are; how do you reach them?

Sarandos: Completely automatically. We did advertising for House of Cards on billboards, but that was very much industry-focused, letting New York, L.A. and London know that we’re in the original content business. But the wins on the viewing were all happening on the website and on the user interface, which recognizes that you’re one of those people and presents House of Cards to you in a pretty aggressive way. Fincher cut seven different trailers for us. Some of them were focused really heavily on the female characters, some on the politics, some on Kevin Spacey, one on David Fincher. So the trailer that you saw was based on what you were just watching or what you just watched recently.

Holland: For Hemlock Grove, we targeted a younger demographic, and it was less about the cast and more about the genre. We created a thematic trailer that was more focused on Eli Roth fans. We created one focused on the teen romance elements of the show. And then one focused on the thriller aspects of the show.

THR: What will “Phase 2” of your original series programming look like?

Sarandos: It’s feasible that we would double the load that we did this year [with eight new shows]. People’s tastes are wildly diverse, and I want to be able to appeal to all of those tastes and across demos. Hemlock Grove is totally different from House of Cards. Orange Is the New Black is a very different show. I think we can support a lot of specific tastes.

Sarandos:Sense8 from the Wachowski siblings is a genre that we were looking for, adult contemporary sci-fi, and done in a way that’s very difficult to do for television, both because of budget constraints and because sci-fi storytelling tends to be very complex. Because of our “watch them all at once” mentality, we were able to allow them to create a dense and complicated world.

The other thing I look at is the tween segment. Hemlock Grove is horror, but it’s not really CW horror; it’s much more adult than that. So I think that we’d like to look at some series in that category. There’s probably a lot of opportunity in the comedy space, too. The more traditional sitcom space, but done with a different twist. Not like a straight-up-the-middle network sitcom, but the kind of thing that I think FX has done a great job with in shows like Louie and Wilfred.

And then we’re doing quite a bit in the original standup comedy space, too. Bill Burr, for example, is somebody who has had a great cult following, and now his audience is getting so large from him being on Netflix. He is touring in all of the parts of the world where Netflix is, like Norway and Finland, because he has an audience there now. So, we’ll definitely be competitive [with HBO and Showtime] in that space. it’s also a great way to cultivate talent for future scripted projects.